Thread by @meghanncuniff

It’s the seventh day of testimony in Michael Avenatti’s federal wire fraud trial involving Stormy Daniels, and he’s to call his first witness in his defense case at 9 a.m. today. Case should be with the jury tomorrow. Follow this thread for updates. ⚖️🧵⚖️

First witness is expected to be Stormy’s friend Justin Loupe, who Avenatti is to question about the quality of Stormy’s memory.  He had a motion to quash in, but he withdrew it in what Judge Furman said last week was a bizarre email to the court from his lawyer, Richard Palma.

Then he flew back to New Orleans over the weekend. But his subpoena is still active, so he could be back this morning.

Avenatti said yesterday he likely won’t testify, which follows prosecutors detailing their plans to ask him about the Nike convictions and the California case.

Prosecutors had their own motion in to preclude Avenatti’s ability to question motive/integrity of other investigations. Avenatti didn’t oppose, told Furman yesterday he was too busy with other filings. So Furman quickly granted it. (Read it here: bit.ly/3HiDpIx)

Furman yesterday denied Avenatti’s Rule 29 for acquittal, saying Stormy “clearly testified that you did not have the authority to redirect the 2nd or 3rd payments.” That’s after Avenatti brought up his impeachment of Stormy saying she never told him she closed her book account.

Avenatti had a text from her showing she did, which he said he got two weeks before he told literary agent Luke Janklow of @JanklowNesbit to send payments to him at a new account. But Furman said that doesn’t make up for Avenatti redirecting the payments w/o Stormy’s permission.

Remember: Avenatti is only charged with stealing Stormy’s 3rd payment. He intercepted her 2nd payment, but he got a loan from Mark Geragos as Stormy was asking about it, then paid her the same day.

The loan was negotiated by Sean Macias, who Avenatti asked for money while at the Girardi Keese party during the Cali plaintiffs’ bar conference in Vegas in 2018.

https://twitter.com/meghanncuniff/status/1486472321535823875

)

The loan came out through testimony from Macias, Avenatti’s old lawyer and the current lawyer for his ex in ongoing @OCSuperior divorce.

https://twitter.com/meghanncuniff/status/1486478768587816962

(And, according to Macias’ LinkedIn: “Attorney, Problem Solver, Trial Advocate, Shot Caller, and Good Kid.”) screenshot

(Avenatti’s refutation to this is the “do-re-mi” to “run like a banshee” for U.S. president text from Macias, explained here:

https://twitter.com/meghanncuniff/status/1488205579738927116

)

Yesterday began with the end of direct from Elizabeth Beier, the @StMartinsPress editor who worked on Stormy’s book. Jurors saw texts from Stormy to her asking about her payment, and Beier explained she thought Stormy was referring to 4th payment that was due after publication.

She didn’t respond because typically the agent deals with the client. So Beier was deferring to Janklow of @janklownesbit, who as we saw through his testimony in beginning of trial thought Avenatti was the Clarence Darrow of our times and was friendly with him into February 2019.

One email Janklow sent Beier on Dec. 17, 2018, said “Please sit tight on this - Michael spoke about this w/ Stormy and is working it out.”
This continued as Beier got messages from a Stormy PR email asking about 3rd  payment; Beier just thought they were confused and meant 4th.

That’s because, of course, @StMartinsPress had paid the 3rd payment as scheduled. In one Feb. 11, 2018 email, Beier told her colleagues Stormy’s people were trying to get that payment “anyway they can (sort of don’t blame them).”

Two days later, Stormy texts Beier directly and says she’s “very confused” why she hasn’t been paid and says, “I’ve been lied to repeatedly about this.” That struck a chord with Beier.

“Something in this text sparked me in a way that the previous communications did not. I think it was the ‘I’ve been lied to,’” Beier testified. She called Stormy and realized it was the 3rd payment she hadn’t received.
“I was surprised because we had paid it in September.”

One thing - AUSA Andrew Rohrbach asked Beier if Avenatti ever threatened to sue @StMartinsPress, which she’d already answered ‘no’ to so Avenatti objected as asked and answered, but Judge Furman said: “Given the intervening weekend, I’ll allow it.”

^^^ Does that mean Judge Furman was open to the idea of Avenatti threatening to sue @StMartinsPress over the weekend? Beier still answered ‘no’ like she did last week.

Avenatti’s cross focused on Stormy’s book sales, which he said were “terrible” but Beier said weren’t that bad. “I would not use the word terrible. We did not think there was enough publicity for the book,” she said.

She said they sold 40,000 copies of the book when they expected to sell “about four times as many as we did.” 150k. “Expectations and sales in the publishing industry often divulge,” Beier said.

At one point Beier said Stormy was due about $4 a book in royalties beyond the $800k advance, and Avenatti said, “Correct, so..” before Furman cut him off with a ‘sustained’ and reminded the jury Avenatti’s questions aren’t testimony.

“Please restrict yourself to questions, Mr. Avenatti,” the judge said. Beier acknowledged @StMartinsPress lost money on the book, but she said, “We were very glad to do the book.”

Here was a rare overruled prosecutorial objection by Judge Furman: 
“Did you ever call me and Mr. Janklow in August 2018 great partners?” Avenatti asked Beier.
Objection overruled.

Avenatti also pressed Beier about Stormy’s book signing at the Museum of Sex (@museumofsex), and said in his questioning she was two hours late for the signing. It was after Beier said she didn’t remember if Stormy was late, so Furman sustained the objection.

AUSA Andrew Rohrbach “very briefly, your honor” re-direct asked Beier about the fact that book sales are not at all tied to the the advance payments. Stormy was due her $800,000 no matter how the book did.

Rohrbach asked Beier about Stoemy’s 3rd payment, then asked, “Did @StMartinsPress expect that payment to go to the defendant?”
“No,” Beier answered.
“No further questions,” Rohrbach told Judge Furman.

Prosecutors also read the stipulation about Avenatti’s California State Bar duties from the Nike case, after he wouldn’t stipulate to a new one for this trial.

See yesterday’s thread for the rundown on Avenatti’s witnesses, which included Avenatti telling Furman his order over the weekend that Carlos Colorado didn’t have to travel to NYC made all the other witnesses think they didn’t have to show up either.

“You’re trying to blame your own lack of preparation for your case on me. And that is absolutely unpersuasive” and not appropriate, Furman said.  

https://twitter.com/meghanncuniff/status/1488134468519006216

Here’s where we’re left on witnesses:

https://twitter.com/meghanncuniff/status/1488302112996040707

The judge said yesterday they’ll dismiss the jury then they’ll do the charging conference where they finalize jury instructions etc. Then they’ll do closing arguments Wednesday and the jury will get the case.

One last observation before I go into the no-electronics-allowed, grueling-trial-schedules-with-no-bathroom-breaks bunker that is 500 Pearl St. Manhattan: I have on at least one occasion heard Judge Furman call the lectern a podium.

Check back later for updates.
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Alright, Avenatti rested jus case without calling a single witness. This is after he got Stormy’s friend Justin Loupe to fly back to NYC early this morning from New Orleans. His flight was to land at Newark airport about 9:48 am.

Judge Furman was deciding whether to wait when Avenatti met with his standby counsel, then told Furman he’d decided not to call Loupe after all.

So the jury went home for the day, then Avenatti and prosecutors are back before Judge Furman at 1 pm for a charging conference. Then closings tomorrow, with AUSA Robert Sobelman estimating his at 90 mins and Avenatti saying two hours. Furman said no longer than two hours, tops.

Remember, while Avenatti cross-examined five of his accusers iCalifornia trial, making last week’s showdown with Stormy his sixth, he never gave a closing because Judge Selna declared the mistrial. So tomorrow will be a first for him in a pro se setting. bit.ly/3Besso1

After Furman was so militant about bathroom breaks last week, down to the minute, it seems strange jury has most of yesterday, all today off. Judge told them today trial scheduling is more of an art than a science and “the last couple days I have not been painting a masterpiece.”

Regarding Furman not allowing Avenatti to call Richard Marshack or John Drum, the judge said “if anything Mr. Avenatti is to blame” regarding Marshack because Avenatti had counsel in Judge Clarkson’s hearing when Clarkson declined to let Marshack comply with the subpoena.

Avenatti had counsel in Judge Clarkson’s hearing when Clarkson declined to let Marshack comply with the subpoena. So Furman said today Avenatti could have filed a motion to compel sooner.

https://twitter.com/meghanncuniff/status/1486498927008530435?s=21

Regarding merits of Marshack’s motion to quash, Furman said he agrees with his memo, forcing him to testify after bankruptcy judge said no would be contradictory. Marshack referenced Barton doctrine, which Furman said, “I profess I hadn’t heard of that doctrine until yesterday.”

Further, Judge Furman said Marshack’s testimony would be “almost certainly irrelevant.” He said the same thing about Drum’s testimony. He said Drum’s work in the @USAO_LosAngeles case is irrelevant here, and the charges and clients there have nothing to do with Stormy’s vase.

Which isn’t *entirely* true - Jurors heard in this trial that Avenatti sent a portion of Stormy’s book payment money to client Geoff Johnson, who’s one of five victims in California. That’s what @USAO_LosAngeles would call a lulling payment to Johnson, part of wire fraud scheme.

AUSA even asked paralegal Judy Regnier on the stand last week who Geoff Johnson is, and she said client of the firm bit of course didn’t get into fact that he’s an alleged fraud victim just like Stormy, and for a way larger dollar amount.

https://twitter.com/meghanncuniff/status/1426219477893468163

But as SDNY prosecutors have said, this case isn’t about client billing, it’s about a contract. (The same could be said, and @USAO_LosAngeles have said as much, about the California charges with ex-Avenatti client @MichellePhan. A contract with a straight fee, no costs.)

Judge Furman said the financial condition of Avenatti's law firm in years past is "totally irrelevant." "The bottom line is the evidence has minimal if no relevance to this case," the judge said.

Regarding this morning with would-be Avenatti witness Justin Loupe, @United Airlines had a nice moment when the judge was inquiring about Loupe's flight into @EWRairport. Flight 674 was due to land at 9:49 am
"I'm pleased to day it's due to arrive early at 9:38 am," Furman said.

So, shoutout to the pilot and flight crew of @United Flight 674 today for getting a positive courtroom shoutout during the Avenatti trial. I hope the Twitter PR team writes an internal company memo about this. (It ended up being 9:40 am.)

Furman did say Loupe's lawyer "blatantly and egregiously misinterpreted my ruling" over weekend, the one that said Carlos Colorado didn't have to travel to California to NYC, and told Loupe he could go home. He heard details of how Avenatti tried to get Loupe back to NYC.

Avenatti's standby counsel Robert Baum went through texts he sent Loupe's lawyer, Richard Palma, and said they weren't able to get a flight on Monday. Furman wanted times for the texts and dropped Baum this iPhone life hack: "if you swipe left it'll probably tell you the time."

I didn't see it, but apparently Andrew Dalack assisted Baum in swiping left to see individual text time (I confess to not knowing you could do that until Furman said so), because Furman remarked, "An advantage of having a new generation in the federal defender's office."

Baum read Loupe's lawyers texts but stopped short on one, telling Furman, "Then he made a comment about the defense, judge, that I don't think is appropriate."
Furman was fine not hearing more.
"I don't need substantive comments. I just need logistics," the judge said.

"I'm going to alleviate the problem by not calling him," Avenatti said of Loupe.
Earlier, when Furman asked if he'd take the stand, Avenatti said, "I do not intend to testify because the government has not proven its case against me."

Regarding Loupe's flight into Newark this morning.

https://twitter.com/StormyDaniels/status/1488543683473551370?s=20

Here's Judge Furman's draft of the "jury charge" that will be discussed at the conference today starting at 1 p.m. bit.ly/3HjUfqz

Furman said they'll also discuss parameters for Avenatti's closing, what he's allowed tog et into and what he's not, so hopefully Avenatti can follow the guidelines and not be constantly interrupted by sustained objections (or Furman saying "sustained" when there's no objection).

Regarding David Karbley, Stormy's old bus driver who Avenatti claimed would testify Stormy once said she wasn't due any of her book payment, and prosecutors were dubious. He simply said today he'd decided not to call him. (You can just feel Furman's mood when this stuff happens.)

Among Avenatti's proposals: "At all times, Mr. Avenatti acted with a good faith belief that he was not doing anything illegal based on an honest belief that he was entitled to the money he received and never
intended actual financial harm to Ms. Daniels." bit.ly/3IYh9Uv

The charges as stated in Judge Furman's charging document. Like in the California case, there is no specific dollar amount associated with the overall wire fraud scheme. The amount of the missing third payment was $148,750. bit.ly/3CA9VEa

California is 10 wire fraud charges for 10 transactions from $1,900 to $2.5M. We never got to final jury instructions, but Judge Selna was mulling one about specific dollar amount defense v. actual wire fraud law. My @lawdotcom article: bit.ly/3CA9VEa

Like @USAO_LosAngeles prosecutors are doing in the California case, SDNY prosecutors differentiate between the actual book payment money @StMartinsPress paid Stormy and any money Avenatti gave her that wasn’t that actual money but someone else’s (like Mark Geragos).

That brings the second payment, also $148,750, into play even though Avenatti eventually gave Stormy money to cover it (same day as Geragos loan). All this will matter a great deal at sentencing if the jury does convict, because wire fraud sentences are based on dollar amount.

Regarding sentencing, see this tweet and remember ID theft carries two years that must be served consecutively.

https://twitter.com/meghanncuniff/status/1488566148081885188

Ok they got out about 4 and I headed downstairs to exchange my numbered metal coin for my iPhone and laptop. As I was heading out the side doors so was Judge Furman, pictured here, and it was just perfect timing because I’d just grabbed my phone and was outside free to use it. 📸

I’ll tweet out my notebook in a minute, but one big takeaway from this afternoon for me is that, as I’ve reported previously, SDNY prosecutors are only considering the 3rd payment as the dollar amount in the wire fraud scheme. So it’s $148,750. That matters a lot re: sentencing.

Anyway, that was just a passing comment from prosecutors. This afternoon was all about finalizing the charge document, and Judge Furman at first told Avenatti he intended to make him refer to himself in the third person during his closing, but he changed his mind at the end.

Conference began w/ Furman telling Avenatti he wasn't going to incorporate his proposed language regarding fees for his work because it's misstating law. Also, Furman said jury needs to know background and principals, responding to Avenatti's complaints about @StateBarCA talk.

Judge Furman repeatedly said his job is to make sure the jury is lawfully instructed, even if it made Avenatti look bad.

"Sometimes when you have no legal defense, you have no legal defense," the judge told Avenatti.

"If it's an accurate statement of the law, it's an accurate statement of the law," Furman said.
One big point today was how much Avenatti can discuss in his closing that he had a good faith belief he was due Stormy's money. Furman was clear he *cannot* say he believed that.

Judge Furman stressed the importance of him needing to "police" Avenatti during his closing so "he does not treat his closing as a way to testify before the jury without subjecting himself to cross examination."

This all relates to the quantum meruit argument we've been hearing from Avenatti, the idea that under California law he was owed some part of Stormy's book money because of the language of their initial client agreement.

This is what always prompts Furman to point out that the law does not allow Avenatti to lie to his clients and take their money without their permission. This afternoon was no different. He said maybe Avenatti could make some claim that he was owed money that could be litigated.

But Judge Furman again said it's legally incorrect to say to say any law would have given Avenatti the ability to take client money while lying to the client and not disclosing the taking.

However, in a real afternoon stunner, the AUSAs actually told Furman they think Avenatti could point to circumstantial evidence to support his good faith claim, such as the client contract. But what he can't say in closing is "I have that belief." That's testimony.

Judge Furman was dubious about prosecutors' circumstantial evidence claim.
"I'm definitely scratching my head a little bit as to what that evidence might be," the judge said.

Furman got heated when he was telling Avenatti about how quantum meruit isn't a defense, saying with emphasis that law doesn't allow him to take client money, then following up with even more emphasis about Avenatti lying to his client. It felt like a sentencing for a second.

Then Judge Furman brought up the third person requirement for Avenatti, which he objected to.
"It could be seen as a show of arrogance," Avenatti told the judge. Furman said he'll tell the jury he's making Avenatti do it, but Avenatti said the prejudice is still there.

Avenatti told Furman he'd be fine with his public defender Robert Baum giving the closing to avoid all this, and that Baum is prepared to do so, but Furman quickly shot that down, referring to previous comments about no hybrid counsel.
"You don't have a lawyer anymore," he said.

I can't remember the exact context, but it was in regards to California law about attorney trust fund deposits, and at one point Judge Furman told Avenatti, "Ms. Daniels is not instructing the jury on the law."

Judge Furman said no California law says "a lawyer can simply take money from a trust account with telling clients."
"In fact, I think California law is directly contrary to that," the judge said.

Judge Furman said there's a difference between stating that if Avenatti filed a claim for money from Stormy's book deal and it was adjudicated, he could be due money, "and saying I would simply steal that money from her while lying to her."

Regarding the phrase quantum meruit: "I want to be clear: I don't expect to hear those words in front of the jury," Judge Furman said.
Judge commented again about law not allowing Avenatti to take client money "let alone lie to our client to take it."

Then there was this. ⚖️
"You're not going to confuse me, and Mr. Avenatti, I am going to do everything in my power to make sure you don't confuse the jury," Judge Furman said.

So again, Avenatti can't say tomorrow he had a good faith belief he was owed the money. But he can try to point to something from the trial record, testimony, exhibits etc, and saw it shows he had a good faith belief.
"I'm not going to permit you to say you believed anything."

One win for Avenatti: Judge Furman agreed to add a line about how the testimony of a single witness may be enough to evidence someone of something. "I'll throw Mr. Avenatti a bone and add that," Furman said. He wouldn't add a final part about how if that happens you must acquit.

Then Avenatti objected to this language or similar language, telling Furman "I cannot state for the record how strongly I object to this language." He called it commentary, said it "seeks to prejudice the jury with the court's view of the case"

Avenatti said Furman allowing that language would be a "clear error." The judge relented a little. "I think I'm inclined to tone it down a little bit" to avoid the jury seeing it as commentary.

Avenatti then objected to language about how attorneys aren't supposed to commingle client funds etc., but Judge Furman said the paragraph is "spot on for this case" and said any suggestion otherwise "borders on preposterous."

I can't get into all the changes, but I'll post the final charge document when it's filed. Avenatti told Furman he plans to cite the jury instructions in his closing and show portions on a PowerPoint but "I don't want to run afoul of Your Honor tomorrow, or any other time."

Furman said it's fine and he appreciated the head's up. He said attorneys in other trials have displayed jury instruction excerpts in their closings without telling him first, and it "irked" him. (SDNY trial attorneys, take note.)

At the end of the day, Furman revisited his idea that Avenatti should refer to himself in the 3rd person. AUSAs actually said they consulted with the @SDNYnews appellate division and they said they're fine if Furman orders it, but they're also OK with not doing it.

"I'm confident if I run afoul at any point in time, I'll pay a price," Avenatti said.
"Well, let me be clear about what the price may be," Furman said. Judge said he can give the jury a curative instruction on the spot, and he can make Avenatti use third person from there on out.

Earlier, Judge Furman told Avenatti what we saw in action during trial: "I'm not averse to sustaining an objective even before one is made."

Avenatti ran example by scenario. "The evidence shows on Feb. 22, 2018, Ms. Daniels and I entered into this contract," he said.
Furman replied that was an objective statement.
"As opposed to 'I believe I was entitled to the money,'" Avenatti said.
Yes, not allowed.

Judge Furman told Avenatti to "err on the side of making reference" to the evidence and testimony.

So, tomorrow at 9 a.m. Jury instructions first, then AUSA Robert Sobelman will give a closing he pegged at 90 minutes. Avenatti predicted his will be two hours. Then prosecutors can give rebuttal, and then it goes to the jury.

One really word thing - Judge Furman said at the end of the day that a woman approached one of his law clerks today and asked when the jury would be in tomorrow, and she gave the card for a jury administrator with New York State Supreme Court (across the street from us).

Furman was baffled by the whole thing and highly suspicious, said he doesn’t even know if the woman is the same person identified on the business card. (He wouldn’t read her name in open court.)

I don’t really know what to make of it. Avenatti joked about not going to state court tomorrow and Furman said no, I assure you we’re in federal court. So maybe we’ll hear more tomorrow, but it’ll probably just remain a public mystery.

Ok I was just informed they actually do jury instructions after closing arguments here, so my bad.

New filing from prosecutors objecting to a jury instruction change Judge Furman made this afternoon. “The instruction goes beyond the basic defense theory to list certain supporting facts that the defendant is likely to (but may not) argue in closing.”

Judge Furman gave Avenatti until 10 p.m. to respond to the filing. (Unfortunately the “swipe left to see the time” thing works on iPhones not PACER, but judging from my @courtlistener alert order was about 7 p.m.)

Here are the revised jury instructions after this afternoon’s charging conference. bit.ly/3sbrN3v

I was looking through the thread and noticed this. This tweet would have worked better if I’d shared Beier’s answer: “I don’t remember.” A rare overruled prosecutorial objection results in no substantive testimony for Avenatti’s case.

https://twitter.com/meghanncuniff/status/1488503301398306816

A couple more filings, Avenatti’s reply and Judge Furman’s order on prosecutors’ jury instruction objection.

@threadreaderapp Unroll, please. Thank you! 🚀